Kronos Says Business Is Still Growing, Profits More So
August 18, 2008 Timothy Prickett Morgan
The one thing that happens when a company goes from being publicly held to private is that it has at least four fewer reasons to talk to the world about itself since the company doesn’t have to do the quarterly dance with Wall Street and the financial and trade press. But old habits die hard, and human resource and talent management software maker Kronos reported financial results for its fiscal 2008 third quarter, just because it can if it wants to and just to make a little noise for itself.
There aren’t a lot of details, of course, because Kronos is privately held. The Chelmsford, Massachusetts, company, you will remember, went on an acquisitions tear in the late 1990s and early 2000s, consolidating various players coding human resources applications for various server platforms into a single company. And in the spring of 2007, just before Oracle, Infor, or SAP might have snapped Kronos up, private equity firm Hellman & Friedman Capital Partners (H&F) shelled out $1.8 billion to take Kronos private.
In the third fiscal quarter, Aron Ain, the chief executive officer at Kronos, bragged that this was the 114th straight quarter of year-over-year revenue growth and the 84th consecutive quarter of operating profits for the firm. That’s 28.5 years of revenue growth and 21 years of operating profit growth. In Q3 of fiscal 2008, Kronos grew revenues to $186.2 million, up 10.4 percent, and earnings before interest, taxes, and amortization (EBITA) rose by 35 percent to $41.1 million. A year ago, in Q3 of fiscal 2007, the first quarter the company was private, Kronos was grew by 19 percent to hit $168.7 million and EBITA grew by 45 percent to $28.9 million.
Kronos says that over 30 million end users globally sit down to work at a Kronos application screen each day. That make it one of the largest installed bases in the world, and considering the niche nature of human resources applications at companies (there are more end users cranking out transactions or doing other kinds of work than planning employee pay raises or scheduling workers for projects), that seems to be a particularly large user base.
“Our business continues to thrive as organizations increasingly embrace technology to hire the best people and maximize their performance,” explained Ain in a statement. “During our third quarter, we experienced notable momentum in the retail and healthcare sectors; sales of our solutions for small and midsize businesses continued to climb; we exceeded many goals in our talent management business; and we remained focused on global expansion efforts.”